Tennessee Department of Revenue Issues Notice on Food and Food Ingredients Sales Tax Holiday
The Tennessee Department of Revenue recently issued Important Notice #22-10 regarding the 2022 sales tax holiday for food and food ingredients.
Effective July 1, 2022, Public Chapter 1131 (2022) creates a new sales tax holiday starting at 12:01 a.m. on Monday, Aug. 1, 2022, and ending at 11:59 p.m. on Wednesday, Aug. 31, 2022. During this period, food and food ingredients may be purchased tax free. Food and food ingredients purchased from a micro market or vending machine remain subject to sales tax.
Food and Food Ingredients
“Food and food ingredients” are defined as liquid, concentrated, solid, frozen, dried or dehydrated substances that are sold to be ingested or chewed by humans and are consumed for their taste or nutritional value. Food ingredients do not include alcoholic beverages, tobacco, candy, dietary supplements and prepared food. For more information and examples of food and food ingredients, see Important Notice #17-20. The most common example of a dealer selling food and food ingredients is a grocery store. Food and food ingredients are those items otherwise taxed at the 4% state sales tax rate plus the applicable local rate.
Reporting Exempt Sales
All dealers must properly report sales made during the sales tax holiday. For the August 2022 reporting period, sales should be reported as follows:
- Report all sales (taxable and non-taxable) on Page 1, Line 1 (Gross Sales) of the sales tax return.
- Report all sales of exempt food and food ingredients made during the holiday period on Schedule A, Line 10 and Schedule G – Temporary Exemptions.
The information reported on Schedule A, Line 10 is required in order for the State to reimburse local governments for the loss of local sales tax resulting from the tax holiday.
This exemption will only be available for the holiday period. All retail sales of food and food ingredients made after Aug. 31,2022, will be subject to sales tax.
For more information, visit the Tennessee Department of Revenue website.